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RESEARCH PRODUCT

Understanding the role of organizational culture on Artificial Intelligence capabilities and organizational performance

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Master's thesis in Information systems (IS501) Context: The past few years Artificial Intelligence has become the top technological priority for many organizations. AI technologies have a huge potential to improve organizational performance, however many organizations face challenges when adopting AI technologies. Firms achieve competitive advantage when they are able to build capabilities that are hard to imitate. Organizational culture is an important factor when building AI capabilities in order to achieve success when adopting AI technologies. Purpose: The purpose of this thesis is to explain how organizations can develop and exploit AI capabilities by changing their organizational culture. To measure this, we looked at how; 1) organizational culture impacts AI capabilities. and 2) how AI capabilities impact social-, market-and competitive performance. Results: Our analysis validates our four hypotheses. First, organizational culture has a positive effect on artificial intelligence capabilities. Second, artificial intelligence capabilities have a positive effect on social performance. Third, artificial intelligence capabilities have a positive effect on market performance. Fourth, artificial intelligence capabilities have a positive effect on competitive performance. Conclusion: We can conclude that organizational culture is an important factor for developing AI capabilities, and that AI capabilities have a positive impact on an organizational performance. To utilize AI technologies organizations should look at the organizational culture to improve their AI capabilities. Keywords: Organizational culture, artificial intelligence capabilities, social performance, market performance, competitive performance.